Chaparral Announces 2014 Year End Financial and Operational Results
Oklahoma City, March 31, 2015 — Chaparral Energy, Inc. announced its year-end 2014 financial results and provided an update on its operations today. Highlights included:
- Average total production of 30.1 Mboe/d during the fourth quarter, a 26 percent year over year pro-forma increase for the sale of Ark-La-Tx properties
- A 17 percent pro-forma year-over-year growth in reserves to 159.4 MMBoe
- Adjusted EBITDA of $455 million in 2014, a 17 percent year over year increase
- Revenues of $681.6 million before the effect of hedging activities, a 15.2 percent year over year increase
- Approximately $300 million in asset sales during the year, completing the company’s shift to become a pure-play Mid-Continent oil and gas producer
- Record-setting activity levels, with the company drilling 119 gross new wells
“Despite market obstacles, 2014 was a good year for Chaparral as a whole and included a number of milestones,” said Chief Executive Officer Mark Fischer. “We completed our strategic shift to become a pure Mid-Continent player, experienced record activity levels and saw strong year-over-year growth in production, reserves and EBITDA. In addition, our proactive and aggressive response to the weakened commodities market, have effectively realigned our cost structure and will allow us to operate within cash flow in 2015.”
Chaparral enjoyed its most active year ever in 2014, drilling 119 gross new operated wells, with 42 in the NOMP, seven in the Oswego, 30 in the Marmaton, one in the Woodford , 21 in our other E&P areas and 18 in our active EOR units. For the year, Chaparral produced 30,088 Boe/d, of which 54 percent was oil, 14 percent NGLs and 32 percent gas. It also grew reserves on a pro-forma basis from 137 MMBoe in 2013 to 159.4 MMBoe in 2014, a 17 percent increase.
In response to the current market environment, the company will focus its drilling program primarily in the NOMP and Oswego plays in Woods, Alfalfa and Kingfisher counties. It will also benefit from production growth in its North Burbank EOR Unit, which will not require a significant capital investment this year as a result of the completion of its phase two facility plans in 2014. As a result, the company anticipates production totals to stay relatively flat on a pro-forma basis from 2014 to 2015 with guidance at 9.7 to 10.3 MMBoe.
Chaparral’s adjusted EBITDA for 2014 was $455 million, a 17 percent year-over-year increase when compared to $389 million in 2013. Revenues before the effects of hedging activities totaled $681.6 million, a 15.2 percent year over year increase. Chaparral’s capital expenditures for 2014 were $752 million, compared to approximately $681 million in 2013. This increase was underpinned by the reinvestment of the proceeds from its approximate $300 million in asset sales. During the year, Chaparral had record-setting activity levels spending $470.2 million for drilling, $115 million for enhancements, $43.5 million for pipeline and infrastructure, $88.4 million for acquisitions, mostly leasehold, and $22.9 million for CO2 purchases. Included in these amounts were costs associated with its EOR project areas of $194.6 million. Overall, Chaparral had a net income of $209.3 million in 2014, compared to $55.7 million the previous year. Much of this increase was a result of non-cash valuation increases in forward derivatives.
The company also has estimated SEC-proved reserves of 159.4 MMBoe, with a PV-10 value of approximately $2.5 billion. On an absolute basis, even after property sales, this is a one percent volume increase and an eight percent PV-10 value increase over 2013 reserves, which were 158.5 MMBoe and $2.3 billion respectively. Its year-end reserves were 58 percent proved developed and 74.1 percent oil and natural gas liquids. Approximately 57.5 MMBoe or 36.1 percent is associated with our active EOR project areas.
Also of note, the company completed its semi-annual bank redetermination, which will be effective April 1. The company’s borrowing base will be lowered from $650 to $550 million. Although this is a $100 million decrease, given the rapid and sharp decline in oil prices since last summer, Chaparral believes this shows a strong vote of confidence in its assets and aggressive restructuring actions to date.
The company’s year-end financial and operating results call will be held at 9 a.m. Central, Tuesday, March 31. Interested parties may access the call toll-free at 888-471-3843 and ask for the Chaparral Energy conference call 10 minutes prior to the start time. The conference ID number is 8150810.
In addition, a live webcast of the call will be available through the Investor section of the company’s website. For those who cannot listen to the live call, a telephonic replay will be available through Tuesday, April 14, by calling 888-203-1112. The pass code is 8150810. An archive of the call will also be available shortly after its conclusion on the Investor section of the company’s website.
Statements made in this release contain “forward-looking statements.” These statements are based on certain assumptions and expectations made by Chaparral which reflect management’s experience, estimates and perception of historical trends, current conditions, anticipated future developments, potential for reserves and drilling, completion of current and future acquisitions, and growth, benefits of acquisitions, future competitive position and other factors believed to be appropriate. These forward-looking statements are subject to certain risks, trends and uncertainties that could cause actual results to differ materially from those projected. Among those risks, trends and uncertainties are our ability to find oil and natural gas reserves that are economically recoverable, the volatility of oil and natural gas prices, the uncertain economic conditions in the United States and globally, the decline in the reserve values of our properties that may result in ceiling test write-downs, our ability to replace reserves and sustain production, our estimate of the sufficiency of our existing capital sources, our ability to raise additional capital to fund cash requirements for future operations, the uncertainties involved in prospect development and property acquisitions or dispositions and in projecting future rates of production or future reserves, the timing of development expenditures and drilling of wells, the impact of natural disasters on our present and future operations, the impact of government regulation and the operating hazards attendant to the oil and natural gas business. Please read “Risk Factors” in our annual reports on form 10-K and other public filings. We undertake no duty to update or revise these forward-looking statements. The market data in this presentation has been prepared as of February 27, 2015, except as otherwise noted.
Founded in 1988 and headquartered in Oklahoma City, Chaparral is an independent oil and natural gas exploration and production company. The company has capitalized on its sustained success in the Mid-Continent area in recent years by expanding its holdings to become a leading player in the liquids-rich Northern Oklahoma Mississippian and the oil-rich Panhandle Marmaton plays. Chaparral is also the nation’s third-largest carbon dioxide enhanced oil recovery producer based on active projects. This position is underscored by its activity in the world-class North Burbank Unit in Osage County, Oklahoma, which is the largest oil recovery unit in the state. For more information, please visit chaparralenergy.com.